'Cost' of a mortgage moratorium?

delly

Folks, just wondering what the long term cost of a mortgage moratorium is. I was given notice of redundancy at the start of the month and still have two weeks left to work.

I didn't hang about however and applied for a mortgage moratorium straight away but was expecting this to be a capital moratorium as I was told that my building society didn't do full moratoriums. So low and behold I got a letter today stating that I would be getting 3 months break for both capital and interest which was a pleasant surprise. I'm just wondering now however, is the cost of taking a 3 month break really only going to add a few euros on PM? There is about 28 years and €250k left to pay off, with current payments being around €1,100 PM. Would anybody have a rough idea what the long term cost of this would be?

I felt that I would be able to meet the interest payments as I don't feel right paying nothing back, even for a short period and was planning on applying for the mortgage interest supplement to assist at the same time. I'm happy the bank are willing to give me a full break, once however it doesn't leave me in a worse off position in the long term.

ricman

it,ll cost at least ,3k 300euro, 3,300 ,it hard to work out exact cost, interest rates change, say you pay 1000 per month, part of that is interest ,part is capital payback of the loan.THE LOAN WILL go on for 3months longer,ie 25years plus 3 months.
if i go to bank now at current interest rates ,i borrow 100k, it will cost me at least 200k approx to pay it back .
AFTER x amount of years the amount of interest you pay goes down,the amount you pay off the loan goes up,
the first years mortgage is mostly interest payments.
over 25 years 3months is not worth worrying about, as long as you are on a standard variable rate mortgage.
its like i,m not worried whats my esb bill in ten years time ,its pointless to worry about it.
you take a break you are worse off by 3300 ,its not a major disaster .AND it,ll be a slightly longer
loan by 3 months.

delly

Thanks for the reply. I know the makeup of the current repayments is €400 capital and €700 interest and that's while on a 2 year fixed rate of 3.5% which I had only just signed up to before I got the bad news. They also said that after the 3 month moratorium they will recalculate the payments PM but the term of the mortgage will remain the same, so essentially i'll be paying an extra €3,300 over that period.

I get what you say though, no point in worrying about it, as the effects won't really be seen in the long term.

rugbyman

Accept the offer you have been given. As has been pointed out the extra at the end of the mortgage is neither here nor there.
other factors are, whether or not you will find work easily enough and at what rate of pay.

The state is willing to help with interest payments when you are unemployed.
If you have some savings ,and I as sume you have as you have indicated that you would have paid some of the interest, keep the savings intact. they are for a rainier day.

You need to consider long term whether your house is worth more than you owe. It is against the rules of boards for me to go any further on that line.

Regards Rugbyman

delly

I think I understand what your saying rugbyman, but tbh its a family home and one which we have made the family to go along with it. I'm not too worried at the moment and have a positive outlook on the situation while at the same time aware of the long term implications of being out of work. As long I have some money to spare i'll meet my obligations.